TikTok Sells US Unit to Oracle and KKR
- This article provides a comprehensive overview of the agreement between ByteDance, TikTok, and U.S. investors to avert a potential ban of the popular video-sharing submission, as of January...
- ByteDance, the Chinese parent company of TikTok, has signed legally binding agreements with three major investors - Oracle, Silver Lake, and MGX - to sell over 80% of...
- The agreement establishes a new U.S.-based joint venture, TikTok USDS Joint Venture LLC, designed to operate independently.Oracle, Silver Lake, and MGX will collectively own 45% of this new...
TikTok avoids U.S. Ban with Sale of Majority Stake to American Investors
Table of Contents
This article provides a comprehensive overview of the agreement between ByteDance, TikTok, and U.S. investors to avert a potential ban of the popular video-sharing submission, as of January 18, 2024. It will be updated as new details becomes available.
Deal Structure and Key Players
ByteDance, the Chinese parent company of TikTok, has signed legally binding agreements with three major investors – Oracle, Silver Lake, and MGX – to sell over 80% of TikTok’s U.S. assets. This move aims to address U.S. national security concerns and avoid a potential ban, as announced by TikTok CEO Shou Zi Chew on January 18, 2024.
The agreement establishes a new U.S.-based joint venture, TikTok USDS Joint Venture LLC
, designed to operate independently.Oracle, Silver Lake, and MGX will collectively own 45% of this new entity.
Background and Timeline
The deal represents a significant step toward resolving years of uncertainty surrounding TikTok’s future in the United States. Concerns initially arose in 2020 when then-President Donald Trump attempted to ban the app, citing national security risks. Reuters reported that trump delayed implementation of the ban until January 20, 2024, while efforts were underway to separate TikTok’s U.S. operations from its global parent company.
In September 2023, details of a similar agreement were presented, and Trump stated the proposed deal met the requirements for divestment. The current agreement builds upon those earlier discussions.
Ownership Breakdown
The ownership structure of TikTok USDS Joint Venture LLC will be as follows:
- Consortium of Investors (Oracle, Silver Lake, MGX): 45% (15% each)
- Affiliates of Current ByteDance Investors: 30.1%
- ByteDance: 19.9%
This arrangement ensures that ByteDance retains a minority stake while transferring majority control to U.S.and global investors.
User Impact and Future Outlook
TikTok stated that the agreement will allow its more than 170 million American users to continue using the platform. The company emphasized its commitment to maintaining a vibrant global community.The deal is scheduled to be finalized on January 22, 2024, effectively ending years of pressure on ByteDance to divest its U.S. business due to national security concerns.
The White House has deferred questions regarding the agreement to TikTok. oracle declined to provide comment.